How the US can

The U.S. national debt has long exceeded $35 trillion, and confidence in the dollar is gradually declining. In search of new ways to finance and maintain the stability of the currency, theories are emerging that the United States may use cryptocurrencies and stablecoins to "hide" some of its debts and create a digital financial system.

What do the proponents of this idea say

Supporters believe that:

The United States has a huge national debt of about $35 trillion..
People all over the world are starting to trust the dollar less, alternatives are emerging: gold, cryptocurrencies.
To save the dollar, the United States allegedly wants to "restart" the system, as it already did in the 1970s, when they decoupled the dollar from gold.
Now they can "drive the debt into the crypt", that is, turn it into digital form (through stablecoins), devalue it and start from scratch.

How it looks on your fingers

Now the United States has debts - it's like the country took a bunch of loans from the whole world.
They can't just say, "We're not paying," and everyone will stop trusting the dollar.
But they can create a new system digital dollar / stablecoins. This digital money will be issued under the pledge of American government bonds.
Each new digital coin (for example, USDT or the future digital dollar) must be backed by US bonds. This means that whoever prints stablecoins must buy bonds, that is, give money to the United States.
As a result, part of the national debt moves to the "cloud" of cryptocurrencies: people and companies around the world buy stablecoins, which are backed by US debt, and the US receives money. The old debt is partially repaid.

What does it mean to "devalue and start from scratch"

If a significant part of the debt ends up "inside" the cryptosystem:

It will no longer directly depend on the state budget (it will be like an asset for private companies).
Over time, inflation and economic growth will "wash away" the old amount of debt.

That is, formally, the debt does not disappear, but it is "hidden" in a new system and stretched for years, trying to restore confidence in the dollar.

It is important to understand

This is still theory and speculation, not official US policy.
In reality, they can't just "reset" the debt without the consent of creditors, which would undermine confidence in everything, including the dollar.
However, they can actually use crypto and stablecoins to attract money and partially cover debt, and this has already begun: laws, ETFs, and crypto regulation are emerging.

The point is short

The United States wants every new digital dollar to be backed by their bonds, then each issue of stablecoins = the purchase of their debt.
The more the world uses stablecoins, the more their debt goes "to the cloud" and the less pressure it puts on on the economy.

Binding vs software

Pegged is just a promise that 1 token = 1 dollar. Example: USDT.
Secured (backed) - this is what exactly confirms the value of the token. To issue 1 billion USDT, you need to put assets worth 1 billion dollars (cash, bonds, gold, etc.).

What the USA wants to do (according to this theory)

A rule is being introduced: "Every new stablecoin must be backed by 1-to-1 US Treasury bonds."
To issue 1 billion new tokens, the issuer must first buy 1 billion worth of US bonds on the market.
As a result, every dollar in stablecoins is someone who bought US debt. Stablecoins become buyers of government debt.

What's the point for the USA

When people around the world buy USDT/stablecoins, issuers buy bonds, the United States receives money, government debt flows into the crypt and becomes dispersed around the world.
The United States does not need to print new regular dollars. There is no direct inflation.

The key idea

USDT is still equal to 1 dollar, but to create it, you need to buy US debt.
That is, every new digital dollar = a new US loan from around the world.

How demand for stablecoins is turning into financing US debt

You buy USDT/other stablecoin.
The issuer receives your real dollars.
In order to issue new tokens, the issuer is required to purchase U.S. Treasury bonds.
The money goes to the US treasury to finance the national debt.
The bonds are used as collateral for your tokens.

The result:

You have a digital dollar (USDT).
The issuer has US bonds.
The USA has your money in the form of a loan.

What does this mean for the USA

The more people buy stablecoins, the more issuers are forced to buy bonds. Debt is flowing into the cryptosphere.
Debt stretches over time and does not cause direct inflation.

How old debt "depreciates"

Step 1. debt "hides" in stablecoins

Part of the US debt goes out of the budget and lies as collateral in private companies.
Formally, there is a debt, but it does not hang directly on the state.

Step 2. Time and inflation dilute the amount

Prices and the economy are growing, and old debt is "getting cheaper" in real purchasing power.
While the debt is in the crypto cloud, the US pays only small interest.

Step 3. "restart" the system

When most of the debt is held by stablecoin holders, the United States can declare: "Now we have a digital dollar, and the old debt is just a reserve."
To the outside world, the appearance of debt is "zeroing out"; in fact, it is stretched over time and partially "eaten up" by inflation.

The main thing

The debt does not disappear, but is "packaged" in digital tokens.
People hold tokens, the United States spends their money and gradually reduces the burden on the state budget.

What happens if everyone wants to exchange stablecoins for dollars

If millions of people demand to exchange their tokens for dollars, issuers must sell the bonds. There will be a sharp collapse in their price. Financial panic.
This is called the "bank run".

Why does the USA hope that this will not happen

Stablecoins are needed for trading, there are audits, the market is growing, not shrinking.
In case of panic, the Fed can buy back bonds and give issuers dollars and prevent a collapse.

How can the US prevent a collapse

Emergency loans from the Fed
Issuers pledge bonds → receive dollars → to pay off people.
Withdrawal restrictions
For example, no more than 10% of the volume per day.
Incentives not to go out
Bonuses, cashback, and interest on the balance.
Government purchase of bonds
The Fed and the Ministry of Finance can buy bonds to support the price and provide liquidity.